Economics becomes a science · 1770s–1920s
1896
The Dow Jones Industrial Average
Charles Dow averages 12 industrial stocks to show how the market is doing.
On 26 May 1896, Charles Dow published an average of 12 industrial companies' share prices. One number could now sum up how the market was doing.
💡 Why it made sense then
Investors wanted a quick way to see whether the market as a whole was rising or falling.
Ideas it gave us
- 🧺 Market index
A market index is a number that tracks the combined price of a set group of stocks, such as the S&P 500 (500 large US companies), to show how that part of the market is doing.
Practise with $10,000 in play money
Free. No real money involved.